A couple of posts ago, I spoke to the busting of the SaaS Silo with Web Services and the impact that was having on the SaaS industry.  The last post spoke specifically about using Web Services to add functionality to your app.  While adding cool new functionality to the app is big for the product guys and the marketing guys, the interest from the sales side seems to be driven by a whole separate set of concerns, chief among them… Integration.

According to recent research by both Saugatuck and Forrester, integration has surpassed security as the main concern for enterprise implementations of SaaS.  This is actually a great sign for SaaS vendors.  It means that SaaS is extending beyond the departmental sale and making true progress into the enterprise.  It also means that in order to get past this increasingly common sales objection, companies need to figure out how to use Web Services to integrate their SaaS application.

While enterprise adoption of SaaS has been quite good, it’s usually done at the departmental level initially.  That means good SaaS apps appeal to business users with specific problems.  As the adoption of those applications spreads from the department to the whole enterprise, IT gets involved.  And it’s logical to think IT wouldn’t want a separate employee record in its Taleo system than it has in its payroll system.  Solutions such as Boomi’s Atoms help IT shops avoid that problem.

Besides integrating with legacy applications, Web Services are beginning to help companies integrate multiple SaaS applications.  Up to now the most ubiquitous integration problem, user management, has either been ignored by companies using SaaS or has had to be cobbled together by in house teams.  I can tell you, we use everything from SalesForce to NetSuite to RightNow and we’ve had to put some pretty tricky things in to (imperfectly) manage users.  Now we are seeing ready built solutions from TriCipher and Symplified that are making this easier and easier for both the SaaS vendor and the enterprise.

Finally, the integration piece is allowing companies like Astadia to go beyond SalesForce customizations in to the world of really creating custom applications out of many different SaaS apps.   Astadia’s acquisition of Theikos indicates that pre-built custom applications are going to be a big part of their future.

So while integration may be listed as a concern on SaaS adoption in the enterprise, it’s really an opportunity.  An opportunity to expand your app by tying it in to other SaaS apps, to legacy apps, and to even see it as the basis for custom apps.  Next post, we’ll talk about using Web Services to not only to break down customer objections but to actually create new opportunities.

Posted: June 30th, 2008 under Cloud, SaaS - Software As A Service, Uncategorized, Web Services, Web applications.
Comments: 1

Probably the simplest thing SaaS apps can do to improve their business is to use web services to improve the functionality of their application. By integrating third party applications in “Corporate Mash-Ups” SaaS companies can have the best of both worlds; a robust feature set and a complete focus on their core product.

Companies like SalesForce and WebEx have all shown the value of doing things like offering on-line ordering and billing, tracking site usage, and adding strong reporting and user management features. The problem with all of these additional features take programming time away from the core value of the apps, sales force automation and collaboration. That’s fine if you have 100’s of million in funding and 8 years of development. What’s the new SaaS app to do?

Fortunately, we have a new world of apps available to add that functionality. No longer is it just Google Maps and Hoover information. There is a ton of new apps you can integrate via api’s or web services. Examples include:

• TriCipher - For strong identity management and integration with corporate directories.
• Sabrix - For tax calculations.
• PivotLink - For graphs and pivot tables.
• OpSource Billing - If I don’t get one corporate plug in, Richard, Kim, and Christina get mad.
• Business Objects - For Crystal Reports and others.
• Ribbit - For integrating Cell Phones in to your app. If that doesn’t make sense, go to their site. It’s extremely cool.

This list could be ten times as long and it’s growing daily. Needless to say, a lot of the “extraneous” work of creating the app can now be integrated instead of programmed, allowing your precious coders to focus on the core value you are selling to your customers. This not only keeps the R&D costs down, it allows for more robust apps to hit the market sooner.

Up next, Silo Busting 3 - web services for enterprise integration.

Posted: May 30th, 2008 under SaaS - Software As A Service, Web Services, Web applications.
Comments: 2

It’s time to grow up….and learn to play nice with others.

SaaS adoption in the enterprise has definitely increased. But with that organizations are increasingly asking SaaS applications to start working with both other SaaS applications and the company’s legacy applications as well. According to recent studies by both Saugatuck and Forrester suggest that integration has surpassed security and compliance as Enterprise IT’s chief concern with implementing (or growing) SaaS applications.

This is an extremely encouraging sign. It shows the acceptance of SaaS as a legitimate enterprise software solution by the majority of Enterprise IT shops. Up to now, SaaS has been primarily a departmental sale. HR departments buy Taleo for human capital management, Marketing buys Marketo for marketing analysis, and call centers buy SupportSoft to manage their ticketing. As you know from past posts, selling immediately recognizable value at the departmental level is key to a strong success story in SaaS andwe can see how that has happened.

But now these apps are growing up and reaching across the organization (growing your app is another key SaaS sales strategy.) When that happens, IT is willing to accept the app’s growth, but needs it to do more now. Enterprise IT doesn’t want a separate employee record in Taleo from their payroll system. The want to be able to correlate all this marketing data back to their sales productivity, and they want to use the same master customer record for their ERP system as for their ticketing system. And they don’t want to have different log-ins for each employee, they want a single sign-on solution for all of their SaaS as well as on-premise apps (ala TriCipher.)

So SaaS applications have to stop being Silo’s that work just inside themselves. They need to start using web services to integrate with other SaaS apps and with legacy applications. By doing so, they’ll open up three great new areas for growth

1. Increased Functionality by working with other Apps
2. Enterprise Growth by integrating with existing Apps
3. The Opening of New Sales Channels

Their is so much to talk about in each of those three areas, they will get their own posts in the coming weeks.

In the meantime, think about adding web services, playing nice with others and growing up. It’s a great time to be an adult.

Posted: May 22nd, 2008 under SaaS - Software As A Service, Uncategorized, Web Services, Web applications.
Comments: 2

When Mike Mankowski sent me this blog post today, I figured “Yeah! My running buddy David Greenfield from Altera is writing a post about me. I didn’t even know he blogged.

Alas, it was a case of mistaken identity but the post was real. This David Greenfield disagrees with my hogwash, but that’s O.K., I just like getting quoted. That said, I think Mr. Greenfield’s issue that function (cloud applications) and form (cloud computing) are mutually exclusive is misguided.

I was stating that the next generation of users will demand on-demand, collaborative group applications they can access anywhere and connect to in any way. This is what everything we see on the web from SaaS to Social Networking is driving to. David’s argument that these applications will run like exisiting applications behind the firewall and on servers bought and managed by IT is short sighted.

Instead, I think Cloud Infrastructures will evolve with the applications that they serve. And with that evolution, IT will find a way to exert the kind of data control and security necessary to run Enterprise critical applications. So instead of buying servers, IT will find ways to use cloud resources that give them the same type of control they had with the old models. We are already seeing that today. While an Amazon ec2 cluster is fine for a blog site, when a Web Applications (or SaaS) company wants to sell they know their cloud environement needs to be secure and robust. Hence the proliferation of certifications (SaS 70, PCI, European SafeHarbor, etc.) that have become the ingrained into the DNA of SaaS applications. These are the beginnings of IT reasserting it’s control over cloud apps.

I see the evolution of enterprise class Cloud computing similar to what we saw with Client/Server. When the PC was seen as a toy IT talked about getting apps back under central control. This was accomplished not by moving back to mainframes and mini’s but by evolving PC apps to Client/Server apps. Many people forget that “Servers” are just souped up PC’s with more processors, memory and disk and sturdier versions of desktop OS’s.

Now the interesting thing is how watching these “Cloud Environments” evolve to meet the enterprise needs. 10-20 years from now, I’m sure we’re going to see environments that are as different from today’s clouds as a 30 system HP blade farm is from the PC XT I first used in business.

Posted: February 4th, 2008 under Cloud, SaaS - Software As A Service, Web applications.
Comments: 2

As many who know me, know that I have not been a big fan of Google. I love the desktop search (or I did until I got a Mac with Spotlight) but am not a big fan of their corporate culture. Just because they got search right (emphasis on the past tense, but that’s a later post) doesn’t give them the license to walk around the valley looking down their noses. (Prius anyone?)  They are a notoriously difficult company to partner with and to sell to (probably the real genesis of my distaste.)

I especially dislike the “Do No Evil” motto. As if other companies have the motto ”Do Evil.” It’s like an ad campaign that asserts “Trebelicious BubbleGum has no Spider Eggs in it.” (Although we know that certain telco’s bubblegum does have spider eggs.)

But lately, I’m beginning to like Google. They really do seem committed to an open web, and that is good for everyone. First was their support of Net Neutrality. Actively fighting the telcos in their effort to control what traffic they deliver is critical to the success of the Internet. To see what would happen if AT&T and Verizon got their way on Net Neutrality, one would just have to look at how horrible the mobile web browsing experience is (another area Google is trying to address with it’s gPhone initiative.)

Now one could argue that Google supports Net Neutrality because they don’t want to pay telcos for carrying terabits worth of YouTube videos. Except that Google has more than enough cash to pay the telcos and serve their cafeteria meals in disposable gold happy meal boxes.  If Google didn’t believe in an open web, it would do just that. The truth is while Google can afford to pay the telcos off, start-ups would not. They could effectively bar a good portion of their next generation of competitors from the market by allowing the telcos to set up a content tax that would be a market killer.

Google’s latest salvo of course is their OpenSocial initiative. Again, Google has come down on the side of an open platform over using its muscle to promote a Google-only platform. The cynics of my readers (also known as my family minus my wife) would point out that’s because Google is getting its seat handed to them on a platter in social networking by Facebook and this is their way of fighting back.

And the cynics would be right. They also would completely miss these two points:

1. It doesn’t matter if Google’s self interest helps everyone else. What matters is that we keep moving to an open web platform that fosters innovation and interconnectivity.
2. Google seems to be the only big company that realizes that an open internet is the best way to expand it’s market presence. By making the web more open (and by extension better) they believe they will have more opportunity, not less.

Not surpisingly the old line telco’s and software companies doen’t understand this, which is why we have so many proprietary platforms (from Verizon’s vCast to SAP’s NetWeaver.) Suprisingly, some of the coolest and smartest new companies don’t seem to realize it either. I love Facebook, SalesForce.com and Apple and I use their products every day, but all of them are closed proprietary systems. That makes it difficult for me to interconnect them and other apps in a way I find as useful.

So hats off to Google today. From Net Neutrality, to OpenSocial, to the gPhone - they are making the internet a more interesting place. I’m sure they will benefit from that openness mightily, but so will OpSource, and our customers and thousands of other companies who have yet to be formed.

And to thank them, I have now changed my default search engine from Yahoo to Google. Think that will get me a ride on Google Jet?

Posted: November 5th, 2007 under SaaS - Software As A Service, Uncategorized, Web applications.
Comments: 5

Just a quick update on the last post. I’ve seen a variety of articles on the decline of Educational Software, but I like this one the best. I like it because the time frame represents the delta between my oldest child, who we bought software for, and my youngest, who we have never bought software for. I also like it, because I could find it. (When is the new and better search coming?) I like it mostly because it shows that kids have stopped using installed software and instead use the web for everything.

When these kids who never used installed educational software grow up to adults, do you think they are going to suddenly adapt to installed business apps? No, they are going to use Web Applications for work because that’s what they are used to. And don’t think the old guard will stop it. The old guard couldn’t force people to use main-frames when they were used to PCs.

Just one more reminder, All Apps will be Web Apps.

Posted: October 18th, 2007 under SaaS - Software As A Service, Web applications.
Comments: 1

Reading M.R. Rangaswami’s recent post Where are Software’s Children, I am struck by the continued belief that enterprises will continue to use installed applications through the next generation of software. That is simply not going to happen.

Mr. Rangaswami’s observation of the age of the ruling class of software companies is aging and that most good young programmers and executives are going to Web 2.0, open source, and SaaS companies. He makes a number of suggestions on what the TBA “traditional business application” companies can do to combat that trend. While Mr. Rangaswami is correct in observation, his suggestions in the end will be spitting in the wind.

That is because the young talent is attracted to these companies because of what they are doing, creating the next generation of applications. They have no interest in working on client server technologies. They grew up on the web and they want to be building Web Applications on next generation platforms. The idea that better mentoring will get these people to work on a fading technology is absurd. So the real interesting question is what is the world going to be like when these “Children” grow up.

I remember a similar shift when I first got in to the business world back in the late 80’s. The company I worked for did all their computing on a VAX, and made very minimal use of PCs (just for word processing and some spreadsheets). I was charged with putting together a corporate training database and employee scheduling tools. I never once considered doing it on the VAX. The idea of using that technology was as a complete anathema.

The same thing is happening in todays technology world. These new generation of technologists grew up on-line. They look at client server computing and installed software the way I looked at the VAX. They probably realize the power of it, but would never consider using it or working on it. It’s as separated from their existence as an ATM network would be to todays network engineers.

Which of course leads back to one of my favorite assertions. In the next twenty years all applications will be Web Applications. Not because they are cheaper or easier to use or better platforms for group work (though they are all three), but because they are how the next generation of users and programmers are used to working. This young guard will be the old guard by then and they won’t be installing software any more than I am using a VAX to run my business today.

The hardest part of all of this is realizing I’m the old guard now (I guess turning 40 had something to do with that as well). I love this next generation of applications and I almost wish I could create a training database today so that I could use a Rollbase, or Dataweb, or Coghead to do it. Unfortunately, that will be the job of the Jason Cumberlands of the world. I’ll just have to be content with coming up with ways to help these guys grow in to the “Adults of the Web.”

Posted: October 18th, 2007 under SaaS - Software As A Service, Uncategorized, Web applications.
Comments: 1

Let me be the last to post about “Open Source vs. SaaS”. Two excellent posts have been put up recently (O.K. not so recently.) Anshu Sharma’s and Dave Rosenberg’s. Both are very well written, and I agree with Anshu’s arguments. That said, they both are essentially missing one essential point: all applications will be Web Applications (I think I’m going to say this in every post from here on out.) It doesn’t matter how they are developed, people won’t use them unless they can access them on the Web (my three kids don’t even know what a disk drive is.) The question is why aren’t more Web Applications being developed specifically as Open Source projects.

Let me say first, that the entire argument “Open Source vs. SaaS” is facetious. Open Source is a development model, SaaS is a delivery and usage model. Open Source applications can be delivered as SaaS and SaaS applications can be developed using Open Source methods. The argument arises because so few true Open Source apps are actually delivered as Web Applications (I use SaaS and Web Applications interchangeably.) Instead they are developed as single instance applications that a user installs.

Some companies then take this Open Source base and add Web Application functionality such as multi-tenancy and scalability as well as business functionality and flow to it. (We did as much with Dave’s tremendous MuleSource product when we created the OpSource Services Bus.) But to say these apps are Open Source is the equivalent of saying SalesForce.com is Oracle since they built an app on top of an Oracle Database.

So why aren’t there more native Open Source applications that are run as true Web Applications. Most are single-instance enterprise software that someone installs to use. The most compelling apps of the last 15 years, from eBay’s bidding app, to Yahoo’s Portal, to Google’s Search and SFDC’s CRM are all proprietary apps. Some say that SugarCRM is a Web App, but I think of them as a hybrid company selling both installed and SaaS versions of a single app (and we know what I think of hybrids.) Ruminating with John Rowell, the only one we could come up with was Wikipedia.

Why is Wikipedia the only Open Source/Web Application? Because running a Web Application costs money. You have to pay for servers and power and network and security and backup and so many different items, and that takes the Benjamins. Usually only commercial enterprises have the Benjamins to make that work, and Open Source communities don’t want to develop for commercial enterprises. They’ll do it for Wikimedia (the organization behind Wikipedia), because it’s a charitable organization, but who wants to develop an app for Google or SFDC?

So back to my earlier thoughts. If the Open Source development model is a good one, but all apps will be Web Apps (memorize this people) we need a platform where all of the expensive stuff is taken care of for the high-minded developers to start making apps. Then we can find a whole new non-topic to blog about

Posted: October 3rd, 2007 under SaaS - Software As A Service, Web applications, open source.
Comments: 5